Johnson & Johnson sues Biden Administration to stop drug price negotiation

Multinational giant Johnson & Johnson filed a lawsuit against the Biden Administration over the controversial Inflation Reduction Act (IRA) that gave Medicare the power to negotiate drug prices.

The medical and pharmaceutical products company explained that it intends to stop government overreach that would “deprive the revenues needed to drive research and development of new drugs while jeopardizing the manufacturer’s ability to innovate, compete and operate in the future.”

In its lawsuit filed in federal court in New Jersey, the company requests that it not be forced to participate in the program, which it believes violates the First and Fifth Amendments to the U.S. Constitution.

“While the Government may choose to deceptively describe the Program as involving an ‘agreement’ to ‘negotiate’ a ‘fair’ price, it cannot force manufacturers to echo its misleading messaging,” Johnson & Johnson said in its complaint.

“That provision is the legal equivalent of a gun to the head because it would require the manufacturer to give up access to nearly 40% of the U.S. healthcare market,” they added.

More challenges to legislation

Johnson & Johnson has not been the only pharmaceutical company to file a lawsuit over the IRA. Drug manufacturers Merck and Bristol Myers Squibb made similar arguments. In addition to the companies, the U.S. Chamber of Commerce and the PhRMA group also filed claims.

The legislation

was passed in 2022 on a narrow party-line vote. The legislation authorizes Medicare to negotiate drug prices to make them more affordable for Americans, which would reduce pharmaceutical industry profits.